Statement by the IMF Mission at the Conclusion of a Visit to Tunisia

Press Release No. 13/365
September 26, 2013

At the request of the Tunisian authorities, an International Monetary Fund (IMF) mission headed by Mr. Amine Mati visited Tunis from September 11-25, 2013. At the end of the visit, Mr. Mati issued the following statement:

“The mission held productive meetings with several senior government and central bank officials. It also met with representatives of the banking and private sectors, trade unions, political parties, the donor community, academia, and civil society. The mission discussed the country’s economic and financial situation and challenges to be addressed, the status of the government’s economic and reform program, as well as the best ways for the IMF to continue supporting Tunisia in this phase of political transition.

“Trends in the Tunisian economy at end-June were broadly in line with the objectives of the program supported by the IMF Stand-by Arrangement, although the recovery of the Tunisian economy has proceeded at a more modest pace than anticipated, with a real growth rate estimated at 3 percent during the first half of the year. However, the risks facing the Tunisian economy have become more significant since then. The current political crisis and recent security developments, as well as the deteriorating economic situation among Tunisia’s main trading partners, are having an impact on economic activity. Fiscal and external imbalances are continuing to worsen, and the reforms (most of which are already in progress) are facing some constraints and are proceeding more slowly than anticipated. The short-term risks are on the downside, and vigorous measures—including in the implementation of reforms—are essential, notwithstanding the constraints associated with political developments.

“In order to address the main vulnerabilities facing Tunisia, immediate and urgent efforts are required to control external and budget deficits, reduce banking sector vulnerabilities, and generate more rapid and inclusive growth that can absorb unemployment while reducing social and economic disparities.

“The pursuit of appropriate macroeconomic policies designed to maintain fiscal and external sustainability is essential to preserve macroeconomic stability. This should also make it possible to restore investor confidence, strengthen foreign exchange reserves, and preserve the leeway for responding to exogenous shocks. At the same time, it is vital to expedite the implementation of the government’s reform program in order to generate more rapid and inclusive growth, support private sector development, strengthen the banking sector so that it can underpin economic recovery, and protect the most vulnerable members of society.

“The IMF remains fully committed to supporting Tunisia through financing, economic and financial policy advice, and technical assistance. An IMF review mission in connection with the Stand-by Arrangement supporting the government’s economic and reform program is planned for November 2013.

“The mission wishes to thank the authorities and all those with whom they met for their warm welcome, the excellent arrangements for their meetings, and the frank and productive discussions.”